Volex reports strong growth in revenue, earnings

Power products and integrated manufacturing services provider Volex reported “strong” reported revenue growth of 44.5% in its half-year results on Thursday, to $292.7m reflecting high levels of customer demand in all of its sectors.

The AIM-traded firm said underlying operating profit increased by 31.3% to $27.3m for the 26 weeks ended 3 October, supported by “robust management” of inflationary cost pressures and a proactive approach to manage extended lead times in global supply chains.

It announced three acquisitions in North America in the period, two of which were announced post period-end, focused on defence, military aerospace, off-highway automotive and consumer electricals.

The company also delivered further investment with vertical integration in the “high-growth and strategically-significant” markets of electric vehicles and high-speed data centre cables.

Its board hiked the interim dividend by 9.1% to 1.2p per share, reflecting confidence in ongoing prospects of the business.

“By delivering on our strategy to create a diverse, resilient and flexible global manufacturing business, we have successfully managed the well-documented global supply chain challenges and Covid-19 restrictions and continue to achieve high rates of utilisation across all of our facilities,” said executive chairman Nat Rothschild.

“We continue to invest in new capacity and capability in our manufacturing facilities to support expanding customer demand and deliver on our long-term growth prospects while executing against our merger and acquisition plans.

“The agreed acquisitions of Irvine and TC are in line with our strategy to diversify into defence markets whilst Prodamex complements the recent DE-KA acquisition and expands our domestic appliances presence into North America.”

Rothschild said that, with “excellent” long-term prospects from organic growth and acquisitions, Bolex was confident in its strategy, its operating model and its ability to create further shareholder value.

“Therefore, while we remain mindful of the challenges faced by all manufacturing businesses from continued extended lead times in the global supply chain, we are today reaffirming our outlook for the remainder of the year.”

At 1605 GMT, shares in Volex were down 9.98% at 403p.